Informist, Tuesday, Jan 16, 2024

By Afra Abubacker

MUMBAI – Spices complex closed in the green today on the National Commodity and Derivatives Exchange. Jeera contracts rose for the second day on short covering and coriander rose on fresh buying. 

The most-active March contract of JEERA was at 28,050 rupees per 100 kg, up 4% from the previous trading day. On Monday, the contract hit a two-week low of 25,900 rupees per 100 kg. 

Jeera futures closed higher for the second consecutive day due to short-covering, supported by expectations of a rise in export demand as prices have turned competitive, Ravi Shankar Pandey, senior analyst at SMC Global Securities said.

However, the upside is limited as market participants are actively offloading their positions due to expectations of a bumper crop in April, SMC Global said in a note. The expected increase in production for next season is noted to be around 30% on year due to expansion in acreage, it said. According to the Spices Board, jeera production in 2022-23 was 627,031 tn. 

The 14-period relative strength index has dropped below the mid-point of 50 mark on the weekly chart, indicating a downward momentum shift, Motilal Oswal Financial Services said in a report. 

Spot prices of jeera in the benchmark market of Unjha in Gujarat were largely steady at 32,000-32,5000 rupees per 100 kg, local trader Anuj Mittal said. 

The most-active April contract of CORIANDER closed at 7,804 rupees per 100 kg, up 1.6% from the previous close. Earlier in the day, the contract hit a week low of 7,630 rupees.

With the January contract expiring on Friday, the April contract saw some fresh buying today, Pandey said. However, improved crop conditions, supported by favourable weather and expectations of new crop arrivals from February, are likely to limit the upside. 

Spot prices of coriander in the benchmark market of Kota in Rajasthan were largely unchanged at 7,500 rupees per 100 kg, local trader Satya Narayan Gupta said. "Spot market is silent with nominal arrivals and demand," he said.

Typically, January-March is a slack period in the coriander market as spice millers and traders go for bulk-buying in April when new crop arrivals pick pace, said traders. The same trend follows in the futures market as the January contract is followed by the April contract. 

The most-active April contract of TURMERIC closed at 13,890 rupees per 100 kg, up 2% from the previous close. Concerns over lower production and seasonal demand are aiding turmeric prices. The area under turmeric is seen 10-20% lower in 2023-24 in major growers Telangana and Maharashtra, according to traders. Turmeric acreage in 2022-23 was 323,838 ha, the Spices Board data showed.   

Prices may consolidate on the upside for an extended period as long as prices remain above 12,600 rupees, Motilal Oswal said in a report. However, excessive gains are likely to be capped as export inquiries are bleak at prevailing levels. 

Spot prices of turmeric in the benchmark market at Nizamabad in Telangana were largely steady at 13,100 rupees per 100 kg, local trader Vikas Nagla said. New crop arrival is three months away and the market is running with limited stocks, he said. 

Following are today's closing prices of the most active spice contracts:

End

Edited by Manisha Baxla

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